European finance ministers, meeting in Council on Tuesday 11 March, reached a political agreement on the directive on administrative cooperation in the field of taxation (‘DAC 9’) (see EUROPE 13596/16).
Unveiled in October by the European Commission, this ninth version of the directive aims to transpose into Community law the OECD’s information return, which contains data enabling tax administrators to assess a multinational company’s compliance with the worldwide rules against erosion of the tax base (‘GloBE Information Return’ or GIR) (see EUROPE 13513/4).
“We’re making the next step in implementing the rules on minimum effective taxation of the largest multinationals”, welcomed Andrzej Domański, Poland’s Minister of Finance.
The ‘DAC9’ updates the existing European directive on administrative cooperation by expanding the rules on tax transparency. It simplifies reporting for large corporations and enhances data exchange between tax authorities. It also creates a standard form, which multinationals and large domestic groups will be required to use to report tax-related information that is necessary to ensure proper functioning of the system on minimum rate of corporate tax. This rate, set at a minimum of 15%, applies to the profits of large multinational and domestic groups or companies with a combined annual turnover of at least €750 million.
“This will significantly simplify the filing process and reduce the administrative burden both for tax authorities and companies concerned”, said the Minister.
Member States will have to implement ‘DAC 9’ by no later than 31 December 2025. Countries opting to delay implementation of the Pillar II Directive are still required to transpose ‘DAC 9’ by the same deadline (see EUROPE 13282/23).
Despite the withdrawal of the United States from the international reform of the minimum rate of corporate tax (see EUROPE 13562/8), the European Commissioner for Economy and Productivity, Valdis Dombrovskis, has reaffirmed the EU’s commitment to this text (see EUROPE 13582/19). “Today’s unanimous agreement by EU ministers shows also this commitment very practically from the Member States’ point of view”, he emphasised at the press conference.
Read the compromise: https://aeur.eu/f/fu1
Read the political agreement: https://aeur.eu/f/fu2 (Original version in French by Anne Damiani)